The euro dipped below $1.34 against the US dollar to its weakest level in more than two weeks on fresh concerns about the health of the eurozone, after economic figures were unexpectedly on the downside across the continent.
The single currency fell 0.9 per cent to $1.3313, a 17-day low, after data showed the eurozone economy contracted by more than expected in the fourth quarter of the year. Gross domestic product in the currency bloc shrank 0.6 per cent on the previous quarter against expectations of a 0.4 per cent dip.
The euro had already sustained losses after Germany and France, the eurozone’s two largest economies, revealed a greater than expected contraction in economic growth in the fourth quarter of last year.
German GDP fell 0.6 per cent, below expectations of a 0.5 per cent drop, and French GDP fell 0.3 per cent against expectations of a 0.2 per cent drop on the previous quarter.
Separate figures released on Thursday showed that Japan’s economy also contracted by more than expected in the fourth quarter of last year, dipping 0.1 per cent on the previous quarter against expectations of a 0.4 per cent rise. The dollar rose 0.2 per cent against the yen to Y93.71.
The US was stronger against all other major currencies amid the pullback in risk appetite following the gloomy signs on the global economic recovery. The Australian dollar fell 0.1 per cent to $1.0342, while the Swedish krona reversed its gains made on the previous day after the Riksbank sounded a more hawkish tone on the strength of the krona.
The dollar rose 0.6 per cent to SKr6.3235, having hit an 18-month low against the krona on Wednesday.
The UK pound also continued its slide against the dollar after the Bank of England warned the previous day that it may have to ease monetary policy again to stimulate the UK’s sluggish economic growth.
Sterling fell 0.2 per cent to $1.5493 though it rose against the euro, gaining 0.4 per cent to €1.16.
